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Wednesday, May 18, 2022

MAXTECH

No. 5

Maxtech Holdings

Business: Computer peripherals maker

Location: Cerritos

Percentage Growth: 262

MaxTech Holding Inc. owes a good deal of its skyrocketing revenue to computer modems, which represent about 40 percent of the company’s sales.

Indeed, the 4-year-old company has achieved a market share of about 10.8 percent, making it the second-largest modem distributor after U.S. Robotics, according to Lisa Pilgrim, senior analyst with Dataquest in San Jose.

That market penetration was achieved in large part because computer manufacturers are bundling MaxTech’s modems with new computers and selling the total package together.

MaxTech officials say non-disclosure agreements with computer manufacturers prevent them from disclosing which computer lines include their modems. But many of the “no-name” modems in new computers are MaxTech products.

“With the explosion of the Internet, most PCs sold to the consumer market include a modem. That is how they have been able to get such huge volumes,” Pilgrim said.

The company, founded in 1993, also sells modems through retail outlets such as CompUSA, through mail-order, and through the Internet via America Online.

At the same time, the company has diversified into a wide range of computer-related products, including computer monitors, networking equipment and notebook computers.

“We saw the growth in the modem category as extremely opportunistic,” said Gary Schultz, senior director of marketing. “We have seen competition increase and prices decrease. A modem that we sold in 1990 for $600 sells today for $40.”

“We studied the market trends in the early 1990s,” Schultz added, “which led us to look for other computer product areas to expand into.”

After modems, computer monitors are the company’s best-selling product, Schultz said. MaxTech also sells a notebook computer made with modular components that make it easy to upgrade.

The company has been able to keep its modem division profitable both through a high sales volume, and by finding less costly ways of manufacturing the hardware, according to Pilgrim.

Morris Newman

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